A surge in long-term sickness among working-age adults is driving a steep rise in economic inactivity, according to a government-commissioned review that warns of growing pressure on employers, the NHS and the wider economy.
The review, conducted independently by former John Lewis chair Sir Charlie Mayfield, found that 800,000 more people are now out of work due to health reasons than before the pandemic. If current trends continue, another 600,000 are expected to leave the workforce by the end of the decade.
With one in five working-age adults now neither in work nor seeking it, the report concludes the UK is “sliding into an avoidable crisis” that could cost employers £85 billion a year in lost productivity, disruption and sick pay.
Mental and physical conditions driving the trend
Speaking to the BBC on Wednesday, Sir Charlie said the rise in sickness-related job losses was being fuelled by two main factors: mental health conditions among younger workers and musculoskeletal problems among older ones.
“Work is generally good for health and health is good for work,” he said. “For employers, sickness and staff turnover bring disruption, cost and lost experience. For the country, it means weaker growth, higher welfare spending and greater pressure on the NHS.”
The review estimates the total cost of ill-health-related inactivity at 7% of the UK’s gross domestic product. That is nearly 70% of the income tax the government collects each year. It also places the UK behind other major economies in its rate of disabled employment, with just 53% of working-age disabled people in work compared with higher rates across the Organisation for Economic Co-operation and Development.
Sir Charlie said separately that the the country had to act quickly. “Britain is sliding into an avoidable crisis. Ill-health has become one of the biggest brakes on growth and opportunity. But this is not inevitable,” he said in a statement.
Government launches three-year partnership with employers
In response, the government announced a major new partnership with more than 60 employers to tackle the trend. Over the next three years, these organisations will trial new approaches to prevention, support and return-to-work strategies as part of a national effort to reduce the number of people leaving work due to ill-health.
The initiative will be supported by a new taskforce co-led by Sir Charlie and ministers, bringing together employers, disabled people, trade unions and health experts. It aims to establish a voluntary workplace health standard by 2029 based on evidence from the employer-led trials.
Launching the programme, Work and Pensions Secretary Pat McFadden said the partnership reflected a shared interest between government and business.
“[K]eeping people healthy and in work is the right thing to do and is essential for economic growth,” he said. “Business is our partner in building a productive workforce—because when businesses retain talent and reduce workplace ill-health, everyone wins.”
He added, referring to major firms and small businesses, that was why “we’re acting now to launch employer-led Vanguards as part of the Plan for Change, driving economic growth and opportunity across the country”.
HR body backs focus on early intervention
The Chartered Institute of Personnel and Development, which represents human resources professionals, welcomed the emphasis on prevention and early support in the workplace. Chief executive Peter Cheese said the government’s plans would only work if they were properly understood and adopted across all sectors.
“The report’s success will depend on the extent to which these recommendations are understood by business in driving positive outcomes and backed by policy makers at a national and regional level,” he said.
The review argues that health must be treated as a shared responsibility between employers, employees and health services, rather than falling solely on the state or the individual. GPs, the report notes, are often asked to make binary decisions about whether someone is “fit for work” with little information about job roles or available workplace adjustments.
Jobseekers say stigma and fear are major barriers
Among those affected is Loz Sandom, a 28-year-old with mental and physical health conditions who has not worked in the past year. Speaking to the BBC, they said that despite holding a degree and previous work experience, finding a supportive employer had been difficult.
“I am willing to do the work, and I want to. I want to find a job,” they said. “It’s such a shame because [employers are] missing out on so many fantastic disabled people that can do fabulous jobs.”
Sandom added that more education and support is needed to help businesses meet their legal responsibilities. “I’m not blaming employers entirely. They need support as well. There are things that can be put in place to help employers, help save people,” they said.
Business and trade groups offer cautious welcome
The Confederation of British Industry (CBI) said firms were prepared to engage, but warned that support must be practical and affordable. John Foster, the CBI’s chief policy officer, said that “[w]ith the cost of employing people already a barrier to creating jobs, it’s right that the focus is on how to help firms make the most of their considerable investment in health and wellbeing through better data about what works.”
He added that while the report provided a starting point, the process of reform would take years to deliver results. “Despite being a final report, the task of tackling health-related inactivity is just beginning, and we look forward to working with government and industry over the coming years to translate the report’s principles into action.”
The new initiative also complements the government’s Pathways to Work programme and Youth Guarantee plan, which aim to shift more people from welfare into work by offering personalised support and paid placements.
Industry backs focus on early intervention
The report’s emphasis on early intervention and employer-led health strategies has been welcomed by industry groups. Group Risk Development (GRiD), which represents the group risk insurance sector, said the recommendations reflected established best practice.
Katharine Moxham, spokesperson for GRiD, said the group risk industry had long focused on helping employees remain in or return to work, particularly those facing sickness or disability. She said the review’s endorsement of the vocational rehabilitation model was “clear recognition” of its value to individuals, businesses and the wider economy.
“The report recommends that more employers adopt a Workplace Health Provision model which encompasses case management, early intervention and stay-in and return-to-work plans,” she said. “It further suggests that, as currently, this should be funded by employers and delivered by the existing eco-system of providers, such as Group Income Protection insurers.”
Moxham said GRiD looked forward to continued collaboration with employers and government as part of the Vanguard phase. “It’s encouraging that government wants to see wider adoption of such an approach,” she added. “GRiD and its members look forward to working further with Sir Charlie Mayfield, the new Workplace Health Intelligence Unit and across Government to refine how this will work in practice.”
Wider reforms and legislation underway
The review’s findings come as the government continues to push ahead with its Employment Rights Bill, which includes changes to zero-hours contracts, redundancy rights and employment protections. Some business groups have raised concerns that parts of the bill could unintentionally discourage the hiring of people with existing health conditions.
Meanwhile, Chancellor Rachel Reeves has indicated that public finances are under pressure, raising the prospect of tax changes in the upcoming budget that could further impact employer costs. The government maintains that improving health and work outcomes will be essential to long-term economic recovery.
Sir Charlie’s review concludes that coordinated action across the public and private sectors is needed urgently. “Employers are uniquely placed to make a difference, preventing health issues where possible, supporting people when they arise, and helping them return to work,” he said.
“If we keep Britain working, everyone wins — people, employers and the state.”
